VANCOUVER – A co-operation agreement between PINNACLE MINES of Vancouver and a major Chinese gold producer, ZIJIN MINING GROUP of Fujian Province, was inked in Vancouver today, Aug. 17. The agreement follows Zijin’s $2-million equity investment in Pinnacle.
The deal gives Zijin a toe-hold in Canada, and Pinnacle gets a partner in China. According to the agreement, Zijin will offer selected projects to Pinnacle for joint venture. Furthermore, Pinnacle will offer Zijin a right of first refusal to participate directly in any projects it currently holds, including the Silver Coin project in British Columbia.
Zijin (www.zkjy.com.cn/english) produced approximately 420,000 oz of gold in 2004 from its six gold mines including China’s largest, Zijinshan. Cash costs per ounce were only US$140. The company has acquired 14 mining tenements and the exploration rights to 59 other sites. It controls reserves containing an estimated 315 tons of gold, 3.45 million tons of copper, 0.6 million tons of zinc, 188 million tons of iron ore and 60 million tons of coal. The company had reported income of $228 million in 2004 for a gross profit of $124 million. Zijin stock trades on the Hong Kong Stock Exchange.
In 2004 Pinnacle (www.PinnacleMines.com) and Yunnan Geology and Mineral Resources created a joint venture covering the Yang Wen Chong gold property in Yunnan Province. Pinnacle is hoping the property hosts Carlin-type gold deposits.
This is the first reported investment in a Canadian exploration and development company by a Chinese firm. Other Chinese investments made in Canada have been in the energy sector including coal and natural gas as well as oil sands. In April 2004 SINOPEC bought a 40% share of Calgary-based SYNENCO’s Northern Lights oil sands mining project. CHINA NATIONAL OFFSHORE OIL CORP. has an interest in the Christina Lake steam-assisted gravity drainage (SAGD) oil sands project through its 16.69% stake in MEG ENERGY, also of Calgary.